One small word… but an incredibly massive industry. Longtime readers will know that we’ve highlighted Big Data as a major tech growth trend since we started publishing Wall Street Daily.

Indeed, just a few weeks ago, I wrote about a shift among companies towards using third-party data centers. The goal? To increase their uptime and internet connectivity speed, as well as get better access to equipment.

After the article ran, I received several invitations to visit facilities to see the setup for myself.

This alone marks a significant shift. In the past, these places were secretive and went about their business without fanfare. For example, one data center company was previously so hush-hush that it didn’t even show up on Google Maps!

Today, though, they want to get the word out to accelerate the trend. So I hopped on a flight to Las Vegas to visit one company that doesn’t extend an invitation to anyone…

What Happens in Vegas…

Based in Sin City, SUPERNAP is on the leading edge of data center technology.

Why Vegas – the middle of the desert and hundreds of miles from the country’s main technology centers? Well, the story starts with Enron. Remember them?

Turns out Enron had a secret. The company wanted to trade bandwidth like it traded oil, gas, electricity, etc. It launched a secret plan to build an enormous amount of fiber optic transmission capacity in Las Vegas.

At the time, many telecom and fiber optic companies built fiber in the city, but most people thought it was just to boost capacity. In truth, it was all part of Enron’s plan to essentially own the internet.

Indeed, when the bankruptcy court auctioned off Enron’s assets, its fiber plans were so secretive that few people even knew about the auction, never mind the possibility of profiting from the assets. At the time, the world was awash in unused fiber, so it wasn’t on the radar.

In fact, there was only one bidder – SUPERNAP Founder, Rob Roy.

Fast forward to today, and Roy’s company operates the biggest data centers in the world. In Vegas alone, there are nine of them, with a 10th one coming. Each one holds tens of billions of dollars’ worth of customer equipment, not to mention being pretty expensive themselves!

So what does SUPERNAP provide?

SUPERNAP = Super Power

At its core, SUPERNAP is like many data centers – a big building with a lot of electricity and air conditioning.

SUPERNAP uses an enormous amount of power, closer to what you’d expect from an aluminum smelter than a data center.

However, while Las Vegas has traditionally received its power from natural gas and a little from coal (Hoover Dam provides a surprisingly small amount of power to Las Vegas), SUPERNAP insists on renewable power sources – and its electric utility, NV Energy, is complying. The Nevada desert is an ideal place for solar, of course, but geothermal is also becoming a part of the mix. And SUPERNAP itself is getting into the game, building its own 100-megawatt (MW) solar facility.

What if the power goes out, though?

Well, if it’s an internal failure, there’s always backup equipment. SUPERNAP guarantees zero downtime for servers because even a short outage can cause a lengthy rebooting process for its customers. How can it guarantee this – even if the main power grid goes out?

For a company so critical to so many people, it stands to reason that SUPERNAP has an Uninterruptible Power Supply (UPS) system. After that, it has big diesel generators and tanks, plus contracts with local fuel companies to get the trucks rolling within minutes of an interruption if it needs more juice.

Military-Grade Protection at America’s Data Center

SUPERNAP does all this in an ultra-high security environment, too. At all times, I was accompanied by an armed guard – guards who must have military combat experience, per company policy.

From the street, though, all you see is a high concrete wall – to innocent bystanders, it could be a prison or military base back there. The air conditioners and transformers are on opposite sides of the building, so one can’t affect the other in an emergency. There’s even a simple but ingenious flywheel so the fans will continue to spin long after a potential power outage to them.

Such security and fail-safe operations are hardly surprising, given SUPERNAP’s client list of thousands – including everyone from giants like eBay (EBAY) to a host of local businesses that need computing power but don’t have the resources to build their own data centers.

Just about every internet carrier has a direct connection to SUPERNAP. So if you’re a bank and you outsource your data needs to a big cloud company like Hewlett-Packard (HPQ), as Deutsche Bank (DB) recently did, you can connect your computers at SUPERNAP directly to HPQ’s.

If the bank picks a different vendor for another application – for example, managing its mobile site – that company may well be at SUPERNAP, too. If not, a data carrier like Verizon (VZ) will have a direct fiber line to wherever it is.

Fewer steps in the connection process means fewer opportunities for errors. In fact, one of the “hidden” benefits to using a data center like SUPERNAP’s is the proximity to all of its other customers!

Redesigning Air

On the power and air conditioning fronts, SUPERNAP is a leader. But I was surprised to learn that the company often doesn’t use air conditioning at all! It turns out that because Las Vegas gets so cool most nights, SUPERNAP uses external air with fans only.

On hotter days, SUPERNAP has designed its own air conditioners that provide cooling in four different ways, depending on which is most efficient at the time. That’s not all, though. The company has reconfigured the way cool air is distributed through its facility. It takes advantage of an obvious fact – heat rises – to blow cool air from above and move hot air out through a series of self-designed “chimneys.”

This allows much more heat to be moved than in traditional data centers. In turn, this means SUPERNAP can put much more heat-producing equipment in a given space. That’s important because today’s most advanced servers generate an enormous amount of heat. So a tower that could previously hold only a few servers can now be filled top to bottom.

Nevada: Gambling, Entertainment… And a Data Center Hotbed

Add it all up, and this is why large companies are choosing third-party data providers like SUPERNAP. Sure, some could build their own data centers or employ a “regular” data center, but increasingly, such places don’t meet their needs.

Even if they could, they wouldn’t have direct connections to virtually every bandwidth provider in the country, as well as many of their vendors and customers.

The bottom line is that these independent data centers provide an edge that simply isn’t available for companies that want to go it alone.

In fact, many clients are clamoring for SUPERNAP to build in a second location. With redundancy (i.e., fail-safe security) incredibly important, SUPERNAP’s customers have found it impossible to recreate what they have with SUPERNAP anywhere else.

So SUPERNAP is doing exactly that – it’s building another “super” location in Reno. Turns out Nevada is a pretty good place to build data centers.

To living and investing in the future,

Greg Miller

Greg Miller has spent over 20 years in the financial industry, working up from analyst, to portfolio manager, and eventually to an institutional investor, where he managed over $400-million worth of assets in mutual funds and private accounts. Learn More >>

New levels of security surely are different than my military days. If it was top secret; it was just that. VERY few knew what and where. Armed guards with STK instructions. “Use of deadly force” signs posted, etc. Now, you get a tour, discrbe security measures, know locations,etc. Top secret, indeed. Can we climb their fences? Razor wire and/or electrified (that’s probably too harsh? How long before the landscape will be mapped and on Mid-East computers? Oh well, I guess America can;t have too much of an advantage…

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